The failure to hit such a key fiscal target would be a major embarrassment to the Treasury and could see the UK stripped of its gold-plated rating.

Osborne has staked his economic and political credibility on cleaning up the mess left by Labour and safeguarding the AAA credit score.

But the Office for Budget Responsibility – the Treasury watchdog behind the forecasts in the autumn statement – is widely expected to downgrade the outlook for growth and warn the deficit and debt will not fall as planned. Brian Hilliard, an economist at Societe Generale, said it was ‘crunch time’ for the Chancellor.

‘The ratings agencies will not be impressed,’ he said. ‘The risk is mounting that one or other soon strips the UK of its hallowed AAA rating.’

Mike Ingram, a market analyst at brokers BGC, said: ‘Maintaining a high level of confidence in the UK’s long-term finances is vital. It is set to be a substantial borrower for years to come.

‘If the market were to decide that Italian or Spanish levels of interest rates are more appropriate to UK borrowing then UK public finances could easily be pitched into a death spiral.’

The outlook darkened again yesterday as recession-weary builders painted a bleak picture of the construction industry.

The Markit/CIPS index of activity in the sector – where anything below 50 represents decline – fell from 50.9 in October to 49.3 in November.

Confidence among British builders slumped to the lowest level since the depths of recession in December 2008 following the collapse of US investment bank Lehman Brothers.

CIPS chief executive David Noble said: ‘Parallels to darker days of the economic crisis can be seen in the construction sector which is under pressure from all sides.

‘Businesses are now set for a bitter end to 2012 with little hope of respite in the New Year.’

Fears are mounting that Britain will slide into a triple-dip recession this winter following a brief recovery in the autumn – further knocking the Chancellor’s plans off course.

David Kern, chief economist at the British Chambers of Commerce, warned that abandoning austerity ‘will threaten the UK’s AAA rating’. But he added: ‘Persistent above-target borrowing figures due to weak growth will also endanger our rating.’